Counties call for marijuana sales tax

Columbia-Greene Media

ALBANY — The New York State Association of Counties is calling on the state to impose a 4 percent tax on marijuana for the benefit of municipalities when the issue of legalizing the drug for adult use comes up for a vote this year.

Gov. Andrew Cuomo proposed legalizing marijuana for adult use as part of his 2019-2020 state budget proposal, which would make New York the 11th state in the U.S. to legalize the drug that is still illegal under federal law.

Part of the governor’s proposal includes a 2 percent excise tax of the invoice price of marijuana sold from a wholesaler to a dispensary to be collected by the state and then remitted to the county where the dispensary is located.

Counties and large cities also have the right to opt out of the legalization of the drug.

“There should be parity with traditional sales tax on products such as wine and spirits,” said NYSAC Executive Director Stephen Acquario. “This is the existing business practice, so why change it.”

NYSAC, which lobbies on behalf of county governments across the state, is calling on the state to impose a 4 percent tax on behalf of municipalities if the state legislature passes legislation legalizing the drug.

“I think it is pretty much inevitable the state is going to legalize marijuana,” said Columbia County Board of Supervisors Chairman Matt Murell. “We have not discussed it internally, because nothing has happened yet.”

A 4 percent tax would be helpful to keep property taxes low for Columbia County residents, Murell said.

“The local municipalities is where the real impact will be seen and 2 percent is way too inadequate to offset those impacts,” Acquario said. “This is the impact-related fees that all municipalities will share in.”

Acquario argued counties that share sales tax revenue with towns, such as Columbia County, would be able to share this new revenue under NYSAC’s proposal.

Columbia County’s sales tax revenue increased $3.3 million from 2017 to 2018 — the largest jump of any county in the Capital Region’s eight counties, and has steadily increased over recent years, according to data from the Office of State Comptroller Thomas DiNapoli.

“A 4 percent tax would really benefit our sales tax revenue,” Murell said. “That would mean less of a burden we have to put on the property owners.”

The governor’s proposal estimates the state will generate approximately $300 million in tax revenue through legalizing marijuana.

Greene County’s sales tax revenue increased $1.5 million from 2017 to 2018.

Acquario called the projected revenues the state estimates for the first three years of legalization minimal.

“The revenue is uncertain but the state is expecting less than $500 million in the first few years,” Acquario said. “Municipalities will get maybe 10 percent of that revenue. It is minimal.”

Counties and towns have the burden of providing its residents with education, traffic safety enforcement, addiction services, and other programs that have been proven to reduce the adverse effects of other legal psychoactive substances, NYSAC states.

The Columbia County Department of Public Health put out a statement in January imploring the state take its time legalizing marijuana to properly look into the effects legalization will have on the state and municipalities.

“I think we would be better served if the state looks at the impacts on health and law enforcement,” Murell said. “From the perspective of being prepared.”

The revenue to come from legalization of marijuana is not the main issue, said Greene County Administrator Shaun Groden.

He contended the conversation should still be whether or not it should be legalized in the first place.

“This conflicts with federal law,” Groden said. “So none of these businesses can operate under any bank, forcing it to be a cash-only business. How am I supposed to audit a cash-only business?”

Legalizing marijuana also falls in a gray social area, Groden said.

“I’m not salivating over sales tax revenue that comes from a drug [that] members of the public still are wary about,” Groden said. “We should continue to decriminalize it, because we don’t want someone sitting in jail because they were found with a bag of weed in their jacket. That’s crazy. I think we are moving too fast to legalizing it outright.”